Stone v. Alameda Health System

CourtCalifornia Court of Appeal
DecidedFebruary 3, 2023
DocketA164021
StatusPublished

This text of Stone v. Alameda Health System (Stone v. Alameda Health System) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stone v. Alameda Health System, (Cal. Ct. App. 2023).

Opinion

Filed 2/3/23 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

TAMELIN STONE et al.,

Plaintiffs and Appellants, A164021 v. (Alameda County Super Ct. ALAMEDA HEALTH SYSTEM, No. RG21092734) Defendant and Respondent.

In this appeal from an order sustaining a demurrer without leave to amend, we are called upon to decide whether seven claims for violations of the Labor Code 1 lie against respondent Alameda Health System. In answering that call, we address the following issues: (1) whether the “sovereign powers” doctrine renders respondent liable for certain Labor Code violations, notwithstanding the general rule of statutory construction exempting government agencies from such liability; (2) whether respondent is an exempt “municipal corporation” under section 220, subdivision (b); (3) whether respondent is an exempt “governmental entity” under section 226, subdivision (i); and (4) whether respondent can be sued under the Private Attorneys General Act (PAGA, § 2698 et seq.). Observing that respondent conspicuously lacks many of the hallmarks of sovereignty, we hold that the sovereign powers doctrine applies. For

All subsequent references to statute are to the Labor Code, unless 1

otherwise noted.

1 similar reasons, we are guided by precedent to conclude that respondent is not a “municipal corporation.” (§ 220, subd. (b).) However, in the absence of such precedent, we do not exclude respondent from the category of “governmental entit[ies].” (§ 226, subd. (i).) Finally, we hold that there are at least some Labor Code violations for which a PAGA suit against respondent may proceed. In their first amended complaint against respondent Alameda Health System, appellants Tamelin Stone and Amanda Kunwar alleged seven class action claims related to wages and hours, and six individual claims for race and sex discrimination. 2 When respondent demurred, the trial court sustained the demurrer as to all seven class action claims. With respect to the first six, the trial court reasoned that respondent was a “statutorily created public agency” beyond the reach of the Labor Code 3 sections and Industrial Welfare Commission (IWC) Wage Order invoked in the complaint. As to the seventh, a PAGA claim (PAGA, § 2698 et seq.), the trial court held that such an action would not lie because respondent is not a “person” within the meaning of section 18, there was no underlying statutory violation from which the PAGA claim could derive, and respondent’s “public agency” status exempted it from paying punitive damages. We disagree with that reasoning and therefore reverse the order as to the first, second, third, fifth, sixth, and seventh causes of action. For the reasons given below, we affirm the order sustaining the demurrer as to appellant’s fourth claim.

2 The individual claims are not at issue in this appeal.

2 I. BACKGROUND In response to “the challenges facing the Alameda County Medical Center arising from changes in the public and private health industries,” the Legislature in 1997 enacted Health and Safety Code section 101850, authorizing the Alameda County Board of Supervisors “to create a hospital authority.” (Health & Saf. Code, § 101850, 4 subd. (a)(1).) In turn, the Board of Supervisors created respondent hospital authority to govern the various hospital facilities formerly known as the Alameda County Medical Center. 5 In so doing, the board deemed respondent “a public agency for purposes of eligibility with respect to grants and other funding and loan guarantee programs pursuant to” the enabling statute. Appellants Stone and Kunwar worked for respondent as a medical assistant and a licensed vocational nurse, respectively. Their first amended complaint alleged that respondent “automatically deducted ½ hour from each workday” as if to account for a meal period, when in fact, employees “were not allowed or discouraged from clocking out for meal periods.” This alleged

4 Below, we refer to this section as respondent’s “enabling statute.” 5 We grant appellant and respondent’s respective unopposed requests for judicial notice under Evidence Code sections 451, subdivision (a), and 452, subdivisions (c) and (h). (Rules of Court, rule 8.252, subd. (a).) Of particular note among appellant’s exhibits are Chapter 2.120 of the Alameda County Code (establishing respondent), the Legislative Analyst’s Office’s “Overview of Health Care Districts” as established under section 32000 et seq., and a bill analysis prepared in anticipation of the Assembly vote for the enabling statute. This analysis notes that the creation of respondent might give Alameda County new “options . . . includ[ing] contracting out for selected services, reduced emphasis on the use of civil service county employees, and the ability to make quasi-independent business decisions.” Respondent’s exhibits are its filings with the Secretary of State, which conform to Government Code section 53051’s requirements for “the governing body of each public agency.”

3 conduct formed the basis of seven class action claims: (1) failure to provide off-duty meal periods (§§ 226.7, 512; IWC Wage Order 5 (Wage Order)); (2) failure to provide off-duty rest breaks (§ 226.7, Wage Order); (3) failure to keep accurate payroll records (§§ 1174, 1174.5, 1175; Cal. Code Regs., tit. 8, § 11050); (4) failure to provide accurate itemized wage statements (§§ 226, 226.3); (5) unlawful failure to pay wages (§§ 204, 222, 223, 225.5, 218.6, 218.5, 510, 1194, 1194.2, and 1198); (6) failure to timely pay wages (§§ 204, 210, 222, 223, 225.5, 218.6, 218.5); and (7) PAGA (§ 2698 et seq.). Respondent demurred, arguing that the first six claims were “not authorized against public entities under any of the cited Labor Code sections.” As to the seventh claim, respondent contended that it was not a “person” capable of being sued under PAGA, that the “PAGA claim [was] derivative of” the first six unauthorized claims, and that Government Code section 818 exempted respondent from liability. Crediting respondent’s arguments, the trial court ultimately sustained the demurrer as to all seven class action Labor Code claims, leaving intact only a few of the complaint’s individual race and sex discrimination claims. This appeal followed. II. DISCUSSION A. Appealability Under the “death knell” doctrine, “an order is appealable when ‘it effectively terminates the entire action as to [a] class, in legal effect being “tantamount to a dismissal of the action as to all members of the class other than plaintiff.” ’ ” (Williams v. Impax Laboratories, Inc. (2019) 41 Cal.App.5th 1060, 1066.) Here, although appellants’ individual claims for race and sex discrimination survive, the trial court’s order sustaining respondent’s demurrer as to all seven class action claims under the Labor

4 Code terminated the action as to all members of the class, rendering the order directly appealable. In support of its argument against applying the death knell doctrine, respondent cites Young v. RemX, Inc. (2016) 2 Cal.App.5th 630, Munoz v. Chipotle Mexican Grill, Inc. (2015) 238 Cal.App.4th 291, and Haro v. City of Rosemead (2009) 174 Cal.App.4th 1067, all of which are distinguishable. In those cases, specific causes of action that appeared in the complaint as class action claims survived to be litigated as individual claims. Here, no cause of action that was pleaded as a class action claim remains in any form. Thus, if appellants had “fail[ed] to appeal from” this order sustaining the demurrer to their Labor Code claims, they would have “los[t] forever the right to attack it.” (Stephen v. Enterprise Rent-A-Car (1991) 235 Cal.App.3d 806, 811.) In sum, the death knell doctrine applies. B. Merits 1.

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Stone v. Alameda Health System, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stone-v-alameda-health-system-calctapp-2023.